Facebook, Google and Apple: partners and rivals, too

MENLO PARK -- In war, the saying goes, the enemy of your enemy is your friend. But in the tech industry, sometimes your enemy is also your friend.

Facebook underscored that point this week by unveiling a supercharged app for smartphones based on Android, the mobile operating system created by Facebook's arch rival, Google (GOOG). In a classic Silicon Valley twist, the new app, designed to highlight some of Facebook's best features, won't work on phones made by its close friends at Apple (AAPL).

And while it's conceivable that Google and Facebook may both see benefits from the new Android app, analysts say it's bound to intensify their competition, as the two Internet giants vie for consumers' attention and mobile advertising dollars.

To some, that competition is reminiscent of the complex relationship between Google and Apple -- two companies that have mutually profited from Apple's decision to feature Google's services on its popular iPhones and iPads, even while they're increasingly butting heads.

In an industry where "co-op-etition" is a long-standing tradition, each company knows "they have to be on each other's platforms" if they want to reach as many consumers as they can, said analyst Daniel Matte at the Canalys research firm.

Advertisement

Facebook CEO Mark Zuckerberg acknowledged that point Thursday when he explained why his company decided to build the new Home interface for Google's best-selling Android platform. Facebook has also worked closely with Apple to embed Facebook services into the newest iPhone, but the Home app goes further.

Rather than try to build a unique Facebook phone and operating system from scratch, Zuckerberg explained, "we want to build the best experience for every person on every phone."

But even though Zuckerberg went out of his way to praise the Android operating system, which powers a majority of the world's smartphones, analysts noted the irony in Facebook's effort to piggy-back on its rival's software.

Google has built a huge mobile business by letting other companies use Android, without charge, as an open-source software platform. Android's open design makes it easier for Facebook to create an interface that puts its own services, including photos and messages from the social network, on the home screen of Android phones -- to an extent that Apple might not allow on its tightly controlled operating system.

But with the Home interface, Facebook is essentially taking over the user experience on Android phones, said mobile tech analyst Jack Gold of J. Gold Associates. "To the extent that Facebook has my eyes," he said, "Google doesn't."

Internet companies like Facebook and Google provide online services to consumers for free because they can gather data on users' habits and show them targeted ads. By emphasizing its own services, said Tim Bajarin, a longtime industry watcher at Creative Strategies, Facebook gets "the opportunity to put ads in front of people, for which Google gets no cut."

He added: "Anything that takes away from Google's revenue potential is going to be something Google will cringe at."

While the new Home interface won't show ads for now, Zuckerberg said, "I'm sure at some point there will be."

That's prompted speculation that Google might seek to hinder Facebook by modifying Android or restricting its use in the future. Although Zuckerberg downplayed that possibility, he told Fortune magazine, "I'm not sure how they're going to react."

A few analysts have suggested Facebook's new interface could be an attractive addition to Android, since it's not available for devices running other operating systems. For its part, Google issued a statement that welcomed Facebook's new software while pointedly mentioning some of Google's own apps.

"It's a win for users who want a customized Facebook experience from Google Play -- the heart of the Android ecosystem -- along with their favorite Google services like Gmail, Search and Google Maps," a Google spokesman said. Google Play is the online store for Android apps.

Still, the two companies' relationship increasingly resembles Apple's competition with Google. Those two tech giants were once close partners, and Apple's decision to feature Google programs for navigation, watching videos and searching the Internet helped make the early iPhones and iPads a success.

But after Google's Android emerged as a major force in the mobile gadget world, Apple replaced Google Maps with its own navigation app. Apple also built the voice-activated Siri, which competes with Google's search engine. Google began selling music and other digital entertainment, in competition with Apple's iTunes store.

"Their relationship has fallen apart. They definitely see each other as enemies," said Jan Dawson of the Ovum research firm.

Even so, Google pays Apple a rich slice of its advertising revenue -- as much as $1 billion a year, according to an estimate by Morgan Stanley -- from Google searches conducted on iPhones and iPads.

"In this world of interconnectivity and inter-platform apps, there's no way you can turn your back on your competitor," said Bajarin.

Contact Brandon Bailey at bbailey@mercurynews.com or follow him at Twitter.com/BrandonBailey; contact Troy Wolverton at twolverton@mercurynews.com or follow him at Twitter.com/TroyWolv